A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.

August 08, 2007

No surprise. If the Fed had lowered rates yesterday, the world would have ended for the US dollar. It's already in a heap of trouble, and China hinting that it would sell off its US Treasuries ain't gonna help much. With inflation roaring (real inflation, not government-reported inflation) a rate rise was actually more appropriate. But that would have caused havoc too.

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

The Federal Reserved left a key interest rate unchanged on Tuesday, citing a priority to control inflation even as it acknowledged volatility in the financial markets, including a tighter credit market and an ongoing housing downturn.

Not really much of a surprise what China is saying. The only reason why they ever bought US debt in the first place was so they could keep their currency artificially low. If they are now forced to revalue their currency, what point is there for them to continue to hold our debt? Neither side can afford to proactively move on this issue. The only change to the status quo will come when the US consumer stops buying from China. Then, it will slowly but surely but painfully unravel.

One of my favorite essays of 2007 describes how, in the author's opinion, the US-China economic relationship will play out in the days to come. The essay, by Bernard Ber, is entitled Too Much Like 1929.

Recall Cramer's meltdown video...it started slow and then simply erupted. The linked essay above is similar. If Mr. Ber's reasoning holds up, we're all in for an extraordinarily rough ride.

A sample quote:

I think most people even now after the February 27th turn of events, fail to grasp why the US stock market sold off so sharply after the Chinese stock market sell off occurred first. The idea that a foreign stock market could dictate what happens in the US stock market almost offends the American sense of national pride (so the event is casually dismissed as “market irrationality”). A word of advice: you better get used to it, as there is much more of that to come. The crash is coming.

They will lower in Sept or Oct. At least 0.25% drop is a given. Only question now is will they lower more?

I say yes 4.50% by March. No way they guberment lets housing crash a year from an election. Democrats are already falling over themselves on who will have the bigger bailout and Republicans will soon follow suit.

I have seen this coming from China for a couple of years. China always had the clout to not reevaluate the yuan because they were such a big investor in our Treasuries (hence the reason Hank Paulson has been over there so much). Then I believe the reason that we are suddenly finding out about all the inferior products coming from China is the way the U.S. is pushing back at China (not because they are worried about the consumers). This really is a case of the two countries using each other in the greediest of ways and I take solace that the power brokers in both countries will suffer together. I just feel bad for the sheeple in both the U.S. and China who will lose homes and possibly go without food.

August 8 2007: 7:26 AM EDTNEW YORK (Reuters) -- Mortgage applications rose for the first time in three weeks as interest rates fell sharply and demand surged for home purchase and refinance loans, an industry group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Aug. 3 increased 8.1 percent to 656.5, its highest level since early June.

The four-week moving average of mortgage applications, which smoothes the volatile weekly figures, was up 1.2 percent to 626

From Mish's Blog. Hopefully this will explain the difference between money stock and liquidity/debt. There is a huge difference gang.

Money vs. Debt

As noted earlier here is Minyanville professor John Succo on Money vs. Debt.

Mini-Minyan MailbagMinyan MC to Professor Succo:

I was given these general statistics on U.S. circulation of dollars, and I was wondering if they were somewhat accurate?$2 trln was put in circulation from 1776 through 1990$2 trln more was added and was put in circulation from 1991 through 2000 (for a total of $4 trln)$2 trln more was added and was put in circulation from 2001 through 2003 (for a total of $6 trln)$2 trln more was added and was put in circulation from 2004 through 2005 (for a total of $8 trln)$2.8 trln more was added and was put in circulation from 2006 through 1st half 2007 (for a total of $10.8+- trln)

So, essentially, in the last six and a half years, circulation of U.S. Dollars has increased by 170% (10.8 minus 4.0 = 6.8 trln dollars added to the system). And what do people say about free money?What do you think?

Professor Succo to Minyan MC:

Minyan MC,Yes, but it is not really “money”. The stats you quote are “debt”.There is no “money” any more.The actual money used to be backed by gold.Actual money stock is 0.001% of what people call the money supply.The money supply is really the debt supply.

Thanks to Mr. Practical, Kevin Depew, Paul Kasriel, and John Succo for helping explain how a Japanese style deflation could hit the US. The key point is deflation is caused by a massive increase in credit/debt not supported by a commensurate level of income. In simple terms, there is no way to ever pay back what has been borrowed. It's also critical to understand the distinction between a hyperexpansion of credit and a hyperinflationary printing of money. The former is what caused the Great Depression (and is happening again now), while the latter happened in the Weimar republic and is happening right now in Zimbabwe .

CFC has $187 BILLION in cash. Oh yeah they will be going bankrupt any day now.

August 6 2007: 5:21 PM EDT

NEW YORK (Reuters) -- Countrywide Financial Corp. said Monday it had access to $186.5 billion of cash as of June 30, as the largest U.S. mortgage lender attempts to assure nervous investors it expects to survive a credit crunch that has claimed dozens of smaller rivals.

Countrywide said liquidity included $46.2 billion of "highly reliable" short-term financing, including commercial paper that companies often use to fund day-to-day operations

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

--------------

Gee no credit for the prior posting of this...not surprising After all this is Kweefs blogggggg

I do not know which ones are dumber: American consumers maxing out their credit cards or poor Chinese who at least partially borrow money for that spending binge.

When USofA collapses, there goes their hard earned savings AND jobs. Especially fubar because most Chinese have to save money for retirement and support their old parents at the same time. This is really A-class level stupidity stuff.

We were such fools for EVER letting China gain such foot-hold in the US...they would rape and pilage if they could.They have screwed us on Trade for so long that I am finding some small satisfaction knowing they are now holding the bag on so much of the CDO garbage. They have poisoned our pets and children with tainted products and food, and we need to STOP doing business with them if we have half a brain.

Also--Damn!! Obama and Hillary are CRAZY for wanting to inherit the unmitigated disaster left by Bush and Greenspan....they have flushed everything good about our country down the toilet.

DERRY, NH - With foreclosure rates continuing to skyrocket across the country, Senator Hillary Clinton in Derry, NH today laid out a plan to preserve the American dream of home ownership...

Senator Clinton's plan will....

1. Eliminate prepayment penalties on mortgage products. Prepayment penalties, which are often used on subprime, Alt-A, and non-traditional mortgages, are a problem for borrowers.

2. Establish a $1 billion fund to assist state programs that help at-risk borrowers avoid foreclosure. Hillary will establish a $1 billion fund to support state programs that help at-risk borrowers avoid foreclosure

Still think house prices will fall much? Not me. No wonder Wall St is falling in love with her. She's a dream candidate. Use tax dollars to prop up house prices and save banks from that whole messy foreclosure thing. If I were a banker I'd be writing her a check right now.

How's that 2006 vote looking now geniuses? Oh yeah I would much rather have her in charge than Republicans. Yep, much,much better.

No, No, a thousand times NO, Mr Mcbogue!! I know you have applied to 5 different companies already, and you can apply to another 5 more, but you MUST have 20% down now, and documented income! No exceptions!

Applications don't matter, those that can get funding matter. up to 80 percent of those applying will be denied the credit because they don't have enough down payment, thier credit sucks, or they are in a toxic mortgage that no one will dare to refinance.

Why are mortgage apps up 8% while the housing market toast?Ever hear of a credit crunch? If you have to submit twice as many mortgage applications to get a mortgage, or if you submit five applications and still don't get approved, that's a sign that the housing market has recovered?Pull your head out and breathe.

Countrywide may have "access" to cash, but it may be "access denied" if the credit markets keep rolling up. Just ask Bear Stearns' former bigshot Spector (while he is standing in the unemployment line.)

And if stocks go up 1000 pts today, so what? More shorting opportunities.

Baloney. Cramer and his posse are still laughing at the likes of Keith and his HP doomsayers. They're making a killing off of the market rebound, and they will pick up some CDO action at a big discount too. Our good Uncle Sam will bail out the banks and important players and when that happens Cramer will make even more from your misery!

So go ahead and wait for the "big one" bubble sitters. Inflation is going to eat your lunch and dinner too.

Hillary will establish a $1 billion fund to support state programs that help at-risk borrowers avoid foreclosure

Still think house prices will fall much? Not me

Huh? Over a trillion in ARM's are going to reset in the next year and you think this one billion fund is going to save the day? One billion wouldn't even bail out Podunk NH. Get a grip. The guy that said everything's OK because iPhones were selling makes more sense then you do.

Anonymous said... CFC has $187 BILLION in cash. Oh yeah they will be going bankrupt any day now.

August 6 2007: 5:21 PM EDT

NEW YORK (Reuters) -- Countrywide Financial Corp. said Monday it had access to $186.5 billion of cash as of June 30, as the largest U.S. mortgage lender attempts to assure nervous investors it expects to survive a credit crunch that has claimed dozens of smaller rivals.

Countrywide said liquidity included $46.2 billion of "highly reliable" short-term financing, including commercial paper that companies often use to fund day-to-day operations

HP loses again.

I can show you 110 lenders that said the same damn thing right before the market tore them a new one. They are no longer on going concerns.

Keith, this piece explains how the creditors and investors will/are being screwed. The money quote is right below but it's worth reading in full:

"The local monetary authority estimates that three out of four hedge funds globally are incorporated in the western Caribbean islands."

The Black Pearl is Sinking

August 8, 2007by John Galt

On March 18, 2005, Rob Kirby wrote one of the best articles warning everyone about what the future of our markets might entail titled "Pirates of the Caribbean". Unbelievably, the mainstream media could have picked up this story and exposed potentially one of the greatest financial stories of our time, but thanks to the historical gyrations and long predicted exposure to the fantasy known as "the greatest real estate market in American History" (NAR's words, not mine) plus American Idol 19 (or whatever), it was ignored. Now we might have finally started to see the cannonballs pierce the myth of the greatest story never told. Many of us bloggers and amateur commentators have long whispered and speculated that these island nations investing many multiples of their GDP in U.S. Treasury instruments and corporate bonds were actually part of the proverbial Plunge Protection Team. Well, this week, if you actually read the news instead of having Kwazy Kramer scream it at you, the dirty little secret is out somewhat, and the Black Pearl is taking on water fast.

"Bear Stearns Caymans Filing May Hurt Funds' Creditors" was the headline flashing across Bloomberg this morning, yet it seems it always takes us historian types to tie the big picture together. If you click on the link and read the article, you will see this one key sentence:

"The local monetary authority estimates that three out of four hedge funds globally are incorporated in the western Caribbean islands."

So what does this mean to the average investor? Not only can the big houses do what they want with your money, at the alleged direction of the government and Fed, if they lose your money, too bad, so sad and have a nice day. Instead of traditional bankruptcy laws applying, the Bear Stearns funds, per the Bloomberg article, filed in the Caribbean because the judiciary there usually favors management in bankruptcy proceedings. Now let's all take a big, deep breath and think. On huge downdraft days, there is "sudden" movement in the S&P cash futures just before the open to produce and trigger the program trades to create the perception of a rally. On days where the U.S. Treasuries look like they are going to be taken out and flushed, sudden rallies appear out of nowhere to save the day. When the big financial houses suddenly see their stocks plunge as pension funds, mutual funds and those five individual investors left in the nation crazy enough to play the casino sell them off, suddenly it looks as if these houses are buying each other's stocks, but it always seems to point to the hedgies. Basically it sounds like they have a license to do whatever they want with your money (that's right, a lot of retirement programs are invested in these hedge funds and creative financial instruments) and if they make a mistake, they are protected not only from your legal action but United States government regulations. Not to mention if one of the "big ones" that are "too big to fail" starts to fail, your tax dollars will be used to refund your money at ten cents on the dollar if you're lucky.

And now, as absurd as this sounds, every computer modeled investment which is in trouble, every tranch of the artificially invented CDO's start to go into a realistic price tailspin, we see that the big investment banksters still refuse to mark these products to market to give the investing public a hint as to just how hollow the Black Pearl is. Well, she's taking on water boys. There are mortgage lenders shutting down on a daily basis and the ones with any sense or stability are going back to traditional qualifiers to stop this nonsense in it's tracks. The questions the banksters never input into their bug ridden Vista machines is this; what happens if inflation is higher than the numbers used for the calculations? What happens if the average person elects to eat instead of make their credit card, auto or housing payments? What happens if all the illegals who signed their names with an "X" on the mortgage applications for the $725,000 home in suburban Denver elected to go back home because they found out two years later that the jobs were drying up and not paying as much? More importantly, just how many foreclosed homes can you stack on the deck of the Black Pearl before she sinks? And lastly, what happens when the Black Pearl gets blown out of the water by the Chinese financial navy because the Congress elected to start a currency war and steal all their gunpowder before they were ready to fight?

You see, we do live in perilous times. The revelations that an American company would elect to set up their business in what amounts the Federal Reserve Protectorate of the Cayman Islands to keep the government fiat shell game going and to insure they were investor-proof just in case a mistake occurred should cause a massive sell off in all of the financials and anyone with the term "CDO" anywhere in their prospectus. However the lack of foresight by the average American to read beyond the first paragraph of any legal document has been proven beyond any reasonable doubt. If you do not believe me, just watch what happens when all these A.R.M.'s reset. That's when the screams of illiteracy will reach their peak. Especially when those seven million homeowners go into default, just like Kwazy Kramer predicted.

The American public had best wake up and realize that when allegedly private companies and the government work in a coordinated manner to manipulate a nation's economy and it's currency, especially a fiat currency, a disaster is the inevitable outcome. The strategy of printing money and creating debt for what amounts to a laundering operation in another nation to process and sell to the rest of the world in artificially created financial instruments with leverage of sometimes fifty to one and cute little creative names inferring high returns and stability should set off alarm bells everywhere. But alas, I must concur with the Bubblevisionistas, no matter how you play this, every American will ultimately lose.

The taxpayer always pay for their mistakes. So start having dozens of children now. We'll need them to work in those Chinese toy factories in Kansas when they turn 7 so we can pay off our national debt and restart our economy. Based on the formula being used by the commies now, we should be out of debt by 2112.

I hope the overall economy does well. I only want housing to crash so that the sub-human realtors, lenders and flippers suffer and go bankrupt. DOW up 200 is good news to me. My 401K and Roth are doing very well.

Would it be so bad if all the FB's just stopped paying and lived there until eviction? I think it would be good for the economy as they would have more disposable income. The only ones hurt would be lenders, hedge funds and the Chinese Communist Party. The fly-by-nights like AHM and IMB will go bankrupt and the stronger lenders will survive.

Anonymous said... CFC has $187 BILLION in cash. Oh yeah they will be going bankrupt any day now.

Better read that story again. CFC does NOT have 187 b in cash, they have ACCESS to 187 B. That means they can BORROW 187 b. from banks to finance their loans. P.S. that access to 187 b could disappear tomorrow. That's what happened to American Home, the banks withdrew their credit. It could very well happen to CFC.

I think congress knows that China has us by the balls. Congress is just making a lot of noise to pretend they care about American workers. I'd be very surprised if any protectionist legislation actually got passed. Congress just couldn't be that stupid.............could they?

CFC has $187 BILLION in cash. Oh yeah they will be going bankrupt any day now.

August 6 2007: 5:21 PM EDT

NEW YORK (Reuters) -- Countrywide Financial Corp. said Monday it had access to $186.5 billion of cash as of June 30, as the largest U.S. mortgage lender attempts to assure nervous investors it expects to survive a credit crunch that has claimed dozens of smaller rivals.

Countrywide said liquidity included $46.2 billion of "highly reliable" short-term financing, including commercial paper that companies often use to fund day-to-day operations

HP loses again.

August 08, 2007 12:50 PM

===============================Isnt that really access to more borrowing instead of cash money in their account? Lenders can cut them off anytime as the credit squeeze tightens.

August 8, 2007 (LPAC)--An Italian banking source told Executive Intelligence Review that he considers Bear Stearns to be currently the potential trigger of a chain-reaction collapse.

"If Bear Stearns goes bankrupt, there will be a chain-reaction. You should look at those who loaned money to Bear Stearns," the source said.

"The hole is a large one. Bear Stearns has been the most ruthless speculator out there. Already 3-4 years ago, they were pushing complex derivatives and lending money to subjects with zero credit worthiness. They offered us some of those products through an Italian broker. If they have applied the same techniques in their sub-prime investments, God knows what junk they brought home."

Yeah, a lot of people trying to REFI out of their toxic loans. Also, please note that it said an %8 rise in APPLICATIONS. With the new lending guidelines most of those apps will probably get turned down. Also, with the tougher guidelines in place most people sre submitting multiple applications. Try again when you have some real news.

If the Chinese massively sell dollar, it certainly would depress the value of the dollar in the short term. Specifically, when they were selling them. So the Chinese would lose out quite a bit during the sale.

Afterwards, the Fed could just mop up the excess liquidity created. It might be a little annoying in the short term, but the action would hurt the Chinese in the long term and US could easily recover. Remember that the quantity of US dollars in circulation is controlled by the US not by China.

My gut tells me we're on another tear up to Dow 14,000 and likely beyond. Wall Street is just milking and gaming the system to squeeze out what dollars are left to be had, via shorts or otherwise. The iceberg is just a speck on the horizon right now. Wall Street is totally blind to any news that does not support driving stock prices to the moon. But will the day come? We have had some shock drops in the market...doesn't this wild volatility typically signal that a crash is near?

It's time for America to clean house. First of all when did we let a country threaten us. Especially one who sells us stuff. Remember folks the bays has the upper hand not the seller. So screw them. Secondly all that mortgage fraud and flipster needs to be let flush down the toilet. Third screw Iraq let them kill each other. Let's pull out and spend the money pumping our own economy, with US products, no Chinese shit.

How's that 2006 vote looking now geniuses? Oh yeah I would much rather have her in charge than Republicans. Yep, much,much better.

This is pretty bright of her. The tards that want to hear this stuff don't know that 1 billion dollars won't do jack, but she still gets credit for "feeling their pain". I hate her, but she has a good chance on pulling this off.

CFC has $187 BILLION in cash. Oh yeah they will be going bankrupt any day now.

Please tell me you are just being facetious and are actually this gullible or stupid.

Take a gander at CFCs balance sheet for a second:

http://finance.yahoo.com/q/bs?s=CFC&annual

Their assets to liabilities leaves a paltry $5 billion cash buffer. Further, how can a company have "$187 billion in cash" and only maintain a market cap of $16 billion?

It's pure smoke and mirrors PR. They are trying to maintain the illusion that their finances are fine. Second time around that CFC has come out with a press release touting their "secure" situation. Not unlike that "rumor" that miraculously appeared pertaining to an alleged buyout by B of A. Perfectly timed to coincide with Mozilo's stock sales.

Man, you are an idiot. Seriously. Either you are just a troll trying to get your jollies (pretty pathetic btw) or you are the largest ignoramus that I have ever seen on a blog or message board. And that is saying a lot.

With regards to the mortgage applications rising: so what? They are applications. And how many of those are applications for a refinance?

Try looking at the more tangible numbers rather than regurgitating everything that comes from the realt-whore or lending industries.

But hey, if you wanna play dumb and stay ignorant to the true nature of the situation, that's your prerogative. Bail water out of the Titanic as much as you want. The rest of us are on the life boats.

Yeah, a lot of people trying to REFI out of their toxic loans. Also, please note that it said an %8 rise in APPLICATIONS. With the new lending guidelines most of those apps will probably get turned down. Also, with the tougher guidelines in place most people sre submitting multiple applications. Try again when you have some real news.

Keep throwing the lipstick on the pig called housing while it crumbles around you. MORON!

Apps are up because people are doing multiple apps to try and secure a loan in a very different mortgage market than they dealt with a few years ago. There have been no increases in units sold which is a tip off that multiple apps are proliferating the mortgage market which is locking up as we speak.

It sounds like you know jackshit about the pulse of the mortgage market.

Delta Financial Corporation, together with its subsidiaries, operates as a specialty consumer finance company that engages in the origination, securitization, and sale of nonconforming mortgage loans to individuals in the United States. The company's loan products are primarily fixed rate and secured by first mortgages on one-to-four-family residential properties. It offers mortgage loans through wholesale and retail distribution channels, such as directly from independent third-party mortgage brokers and directly from borrowers. The company, formerly known as Delta Funding Corporation, was founded in 1982 and is headquartered in Woodbury, New York

Thing's go up and they'll go down but the trend will be to approach asymptotically the point at which planet earth will be approx. half waste byproducts and half paper financial instruments. In other words, the destiny to which we all aspire is to monetize the planet. At that point mellifluous melodies will peal from every corner of the universe, and we can all dwell in the house The Man forever.

1-The lenders that are surveyed are now getting the applications that previously went to now bankrupt mortgage lenders.

2-Borrowers are now having to submit multiple applications to fish for a lender that will approve them.

3-Rates have trended down recently on CONFORMING loans so some of the sideline PRIME buyers have come forward. If they can find a seller who's still not on 05 crack pricing they might be able to swing the purchase under the conforming cap of 417k.

Overall this data is useless due to prevailing market conditions which undermine their reliability.

Anonymous said...CFC has $187 BILLION in cash. Oh yeah they will be going bankrupt any day now.

Better read that story again. CFC does NOT have 187 b in cash, they have ACCESS to 187 B. That means they can BORROW 187 b. from banks to finance their loans.P.S. that access to 187 b could disappear tomorrow. That's what happened to American Home, the banks withdrew their credit. It could very well happen to CFC.

-------------------------------I think it gets better. that 187 number was as of June, before the sh*t started to hit the fan.

How could we ever possibly pay back China? We will never be able to pay back even ourselves. We live on borrowed money. This is how we create wealth. We are the financing gurus of the world.

Sorry China. It was fun while it lasted and we have nothing against you but we just love to spend other peoples money. If you want your money back you will have to sell those treasuries while they are worth something.

One thing that really keeps me interested is the fact that the large institutional lenders need to publicly state that they are in good shape. If history teaches us anything, it is that the corporatocricy is concerned with one thing and one thing only; profit.

Take this one step further, remember the book 'Confessions of an Economic Hit Man', this method is now being applied to the American middle class in what amounts to the biggest looting of our assets in history and further concentrating them in the hands of fewer and fewer individuals.

Just in case you haven't figured it out yet, we ARE going into a depression that will make 1929 look like a picnic.

Watch for it when Countrywide or Bear Stearns fall. Nothing the Fed or Humpty Dumpty do will be able to put it back together again.

Perhaps then we will begin to seriously entertain some meaningful social change and economic equality.

This is pretty bright of her. The tards that want to hear this stuff don't know that 1 billion dollars won't do jack, but she still gets credit for "feeling their pain". I hate her, but she has a good chance on pulling this off.

$1B is a lot of money. People talk about 2 million people being in foreclosure trouble. Truth of the matter is of those millions, probably 1/2 are flippers/investors. That leaves a million. Of that million, say 50% are truly in danger of foreclosure as opposed to just in bad shape but can make it by cutting out eating out and vacations.

So you have 500K people and $1B to give out. Leaves $2000 per person...not a hell of a lot you say. But for these deliquent sub-prime idiots $2K is a lot of money. If the ARM is a $500 reset, that $2K is 4 months worth of help. And that 4 months will be perfect as 4-6 months later part 2 of the Hillary plan kicks in which is mandatory refinancing to 30 year fixed loans at the intro teaser rate combined with a new 1% fed funds rate.

If this were 2005 I'd say yeat housing is a gonner. A year from a presidential election, no way that's happening.

Everybody bashes China and free trade. Frankly, other countries, including China, could AND should have our low-end manufacturing jobs. Who the hell wants to pay $89 for a toaster made by some unionized worker making $40+ an hour? It isn't Bush that killed American jobs, it is the unions. Just look at GM, Ford and Chrysler. They are HMO's and Pension funds that make cars on the side.

Oh and to the Dope who said people are still buying houses..maybe you should tell that to my Neighbor who's house has been up for sale since last June..and its priced to sell he just wants out...Open house after Open house..no one even shows up.

-About 110 lenders have stopped funding new loans, closed offices or gone bankrupt since the beginning of the year. Half of those lenders have operations in Maryland, according to Rooney's office.-

-Lenders are also less likely to write risky second loans so that borrowers can avoid paying mortgage insurance, which is required when they can't afford the standard 20 percent down payment. Those loans became especially popular as home prices rose.-

"If your home purchase was closing tomorrow and your lender is going out of business, you're going to have to start all over, and that's a scary situation. That's where people are scrambling." said DiPino, who owns Universal Trust Mortgage Corp. in Columbia. "But there are still plenty of options out there."

stock market is on fire, mortgage apps up huge, home prices flat, CFC has a gajillion doallars in cash and yet the renting sub-humans still think they will become rich renting apartments and buying 5% CDs.

Better read that story again. CFC does NOT have 187 b in cash, they have ACCESS to 187 B. That means they can BORROW 187 b. from banks to finance their loans.P.S. that access to 187 b could disappear tomorrow. That's what happened to American Home, the banks withdrew their credit. It could very well happen to CFC.

A banker is a guy that will loan you an umbrella on a sunny day, and ask for it back when it starts to rain. It's freaking pouring.

Here's a so called City of London financial insider hinting that something "BIG" occured today that will shake the financial system to it's core. Let's see in the days ahead if there is anything to this================================August 8, 2007 (LPAC) -- Late in the day of Aug. 8, a source working in the City of London reported to EIR that "There is an absolutely massive market event happening today. You'll not see any evidence of it if you just look at the FTSE or DOW index numbers, but its looking like someone is liquidating a huge market-neutral stock portfolio," referring to an investment portfolio which is designed to make money irrespective of general market downturns. The sales took place across the globe, starting in Japan, then in Europe and the U.S. The source said that others in the City believe that, in order to have the market impact that this sell off is having, the size of the portfolio would have to be in the 3-6 billion dollar range.

It is not known as of this writing who is liquidating, nor why - whether it is a desperate need for cash, an intervention intended to impact the market by a central government, or something else, the source said, it is an "unprecedented event." In the dynamic global process now underway, it cannot be seen as an isolated event.

August 8, 2007 (LPAC)--A San Francisco-based mortgage lender, which is reported to have no sub-prime investments at all, appears to be following the giant American Home Mortgage down the tubes, according to MarketWatch.

With only 20 employees and $365 million in annual loan originations, it is seen as a mine canary for other cases of high-end lenders. Luminent was investing mainly in Fannie Mae- and Ginnie Mae-rated prime mortgages. But the losses apparently came from bad investments in mortgage backed securities and collateralized debt obligations.

"Effectively, the secondary market for mortgage loans and mortgage-backed securities has seized up," the company said in a statement.

Everybody bashes China and free trade. Frankly, other countries, including China, could AND should have our low-end manufacturing jobs. Who the hell wants to pay $89 for a toaster made by some unionized worker making $40+ an hour?

Comments like this are simply beyond ignorant. It's hard to even fathom the idiocy that springs from a statement like this

This is the same kind of person that doesnt' for one second sit down and do a quick penciling of the numbers to arrive at the truth. Exactly like all the FB's out there about to eat what's in the gutter for lunch, not thinking to examine the loan document of the reality of boom-bust economic history.

ANYONE that has ever studied military and economic tactics is well aware of the enormous power of *attrition*. It's the cornerstone from which your opponent draws upon all his power over you. Attrition is constructed and employed in a vast array of means.

In Iraq, the insurgents and Iran can spawn enough fighters to grind the U.S. down for dozens of years. They have ample experience at doing for CENTURIES. In fact, much longer the the U.S. has even been in existence.

The same applies to China, an ancient culture, 1000's of years of fighting and scheming and winning, bred virtually into the foundation long before anyone even dreamed of writing the Bill of Right or Constitution.

A land with 1.3 BILLION persons. A land with the equivalent of the entire U.S. population on the move, with no permanent home, any given day, in search for enough subsistence to survive.

A land with the capacity to produce, in quantity and quality virtually EVERY product or service consumed by EVERY person on the face of the earth, with expanding markets, that the U.S. has no relation with.

But more importantly, a place where labor is frequently conscripted, unpaid and in fact slave driven. Where 100's OF MILLIONS are under a command directed COMMUNIST GOVERNMENT. A government that has put together a unprecedented form of hybrid capitalism of which the world has never before witnessed.

This is a place that in the none- to-distant past lived thru and experienced one of the most destructive famines and crop failures ever known to man, from which the political environment created forced collectivization upon the citizens, 100's of millions at a time!

The degree and depth of which China can go to 'grind down' the U.S. is far beyond the wildest machinations of anyone living in the United States. There is simply no frame of reference in our entire history and human experience that can guage where we would have to go to win a battle of attrition with China. The numbers are profoundly imbalanced even without and before considering how much control over our national debt they have.

So, for you, Mr. Brilliant, unless your are willing to produce U.S. products in a prison environment, entirely for NOTHING as your prevailing wage, and then do it for 100 hours per week while living out of a cell with 10 other 'roommates' in close promimity, 7 days week, you'd better think again how smart it is to turn over even our 'low end' wage jobs. There is virtually no depth so low that we can reach to in order to find an equalibrium in the debt environment we have backed ourselves into.

So called 'free trade' has handed over, on a 'silver platter' to the Chinese our entire economic security. To remain on the same track means we have entered into a 1000 year war of economic attrition we cannot win. They know this explicity and if you read the writings of both military and political figures in China, they clearly state their INTENTION to win this contest against us.

THEY MAKE NO SECRET OF THE PLAN. It is we who are too in denial to believe it.

They have our money, but much more critically to the point, they have time and patience on their side and a population and culture that doesn't scream me me me about everything. In fact, to be unique and contra to the governments direction can get you a prison sentence or death. A population that is marching (literally) to the same drummer in unison.

Our is a country of a collective attention deficit disorder, blinded by the facts and without the patience and appetite for the depth we will need to go to win a war of attrition with China.

The future will be very different than we have either planned or imagined.

Anonymous said... Everybody bashes China and free trade. Frankly, other countries, including China, could AND should have our low-end manufacturing jobs. Who the hell wants to pay $89 for a toaster made by some unionized worker making $40+ an hour? It isn't Bush that killed American jobs, it is the unions. Just look at GM, Ford and Chrysler. They are HMO's and Pension funds that make cars on the side.

Did you ever happen to think that higher wages would benefit our economy? For instance, if you live in CA, maybe someone could actually afford to buy the 650 Sq. Ft. shithole they are about to call home. You live in CA?

Anonymous said... This is pretty bright of her. The tards that want to hear this stuff don't know that 1 billion dollars won't do jack, but she still gets credit for "feeling their pain". I hate her, but she has a good chance on pulling this off.

$1B is a lot of money. People talk about 2 million people being in foreclosure trouble. Truth of the matter is of those millions, probably 1/2 are flippers/investors. That leaves a million. Of that million, say 50% are truly in danger of foreclosure as opposed to just in bad shape but can make it by cutting out eating out and vacations.

So you have 500K people and $1B to give out. Leaves $2000 per person...not a hell of a lot you say. But for these deliquent sub-prime idiots $2K is a lot of money. If the ARM is a $500 reset, that $2K is 4 months worth of help. And that 4 months will be perfect as 4-6 months later part 2 of the Hillary plan kicks in which is mandatory refinancing to 30 year fixed loans at the intro teaser rate combined with a new 1% fed funds rate.

If this were 2005 I'd say yeat housing is a gonner. A year from a presidential election, no way that's happening.

let's face it, elites in general suck the big one, and they are all like frenzied sharks feeding off the system.

As to what will be allowed, for getta bout it. $545 TRILLION dollars in derivivatives says that the powers that be don't control shit from shineola. The ball has started rolling downhill.

Aren't you assuming that these people are on solid ground right now with interest only, and will continue to be solvent on that basis? Is this a fair assumption considering the economy is already slowing down? Who knows if they would be OK even if they did NOT have a reset?

There is a term for the "China Syndrom": strong reciprocity, which is defined as the predisposition to cooperate with others, and to punish (even at personal cost if necessary) those who violate the norms of cooperation, even when it is impluasible to expect those cost will be recovered at a later date. In other words, do unto others as you would have them do unto you - but if other don't do unto you, then nail them, even at personal cost to yourself.

Ask yourself this, who has more to lose, the average Chinese or the average American?

Over 55% of Americans believe FB's should be helped until they find out how much it will cost taxpayers. By that time it won't matter. I will take my money and leave this country to the idiots who already run it. Anyone else who is smart and educated would do the same thing. Everyone knows how this game is going to end.

"So you have 500K people and $1B to give out. Leaves $2000 per person."

The money is really for the banks, and it will be a lot more than $1B. I remember when the S&L crisis bailouts were first discussed and the politicians were talking $5B-$10B tops. Congress looked closer and the numbers went up to $50B. When the dust settled and the RTC was finished, it ended up costing $160B.

So bend over pal, this time around the cost will be $1T-$2T, or about $100K per taxpayer. Nobody has that kind of money, so the Fed will just print it. Can you say inflation? I knew you could.

Hey dumb shits, without China, how do ya s'pose we financed the Iraq war through the back door. How do you think we kept our economy artificially afloat the last five or six years? Now, I would appreciate if you all would stop your silly ranting and stick to the subject of China, and quit calling each other names, morons! Excuse me, I mean "anonymous" morons! Especially you, you gutless wonder calling us HPer's as subhuman. HPer's actually have a conscience which is why we care about this whole damn mess that the Bush administration has drug us into. Oops, but again, keep the message on China.

I watched CNBC yesterday and the commentators referred to the Quant Funds that dealt in securities. Stated that there was some movement or technicalities (?) in those funds...unfortunately, could not remember exactly what they said. As of right now, European stocks down by 1% due to some hedge funds, one with triple A ratings, being frozen. Heard just now on CNBC, quant funds are being hit very hard right now (as of 0200 Pacific time}..."volatility extremely high."

Your ethnocentric view of the world and imagination concerning some purported Chinese conspiracy to take over the world is amusing. Paranoid people were saying the same thing about Japan during the 1980's.

Have you ever been to China? If you did, I think you would have a better view of our supposed adversary. The reality is that China is a vast but mostly a rural country with dozens of minority groups. The Communist Party, while it rules, lacks substantive control. China is not even "communist," something I can't say about New York or California. The Communist Party has its hands full keeping 1.3 billion people fed and working much less dictating their every move in some conspiracy to take over the world.

The rise of China is inevitable but it should not be cause for alarm. They will join other Asian neighbors like Japan, South Korea, Taiwan and Singapore as they modernize. Like these other countries, China will have to pay its dues by being the low cost provider. As with the other Asian, European and Latin American countries, America will stay ahead of the curve because it must. If America cannot rise to the challenge, it deserves to suffer the consequences.

Everybody bashes China and free trade. Frankly, other countries, including China, could AND should have our low-end manufacturing jobs. Who the hell wants to pay $89 for a toaster made by some unionized worker making $40+ an hour?

Comments like this are simply beyond ignorant. It's hard to even fathom the idiocy that springs from a statement like this

This is the same kind of person that doesnt' for one second sit down and do a quick penciling of the numbers to arrive at the truth. Exactly like all the FB's out there about to eat what's in the gutter for lunch, not thinking to examine the loan document of the reality of boom-bust economic history.

ANYONE that has ever studied military and economic tactics is well aware of the enormous power of *attrition*. It's the cornerstone from which your opponent draws upon all his power over you. Attrition is constructed and employed in a vast array of means.

In Iraq, the insurgents and Iran can spawn enough fighters to grind the U.S. down for dozens of years. They have ample experience at doing for CENTURIES. In fact, much longer the the U.S. has even been in existence.

The same applies to China, an ancient culture, 1000's of years of fighting and scheming and winning, bred virtually into the foundation long before anyone even dreamed of writing the Bill of Right or Constitution.

A land with 1.3 BILLION persons. A land with the equivalent of the entire U.S. population on the move, with no permanent home, any given day, in search for enough subsistence to survive.

A land with the capacity to produce, in quantity and quality virtually EVERY product or service consumed by EVERY person on the face of the earth, with expanding markets, that the U.S. has no relation with.

But more importantly, a place where labor is frequently conscripted, unpaid and in fact slave driven. Where 100's OF MILLIONS are under a command directed COMMUNIST GOVERNMENT. A government that has put together a unprecedented form of hybrid capitalism of which the world has never before witnessed.

This is a place that in the none- to-distant past lived thru and experienced one of the most destructive famines and crop failures ever known to man, from which the political environment created forced collectivization upon the citizens, 100's of millions at a time!

The degree and depth of which China can go to 'grind down' the U.S. is far beyond the wildest machinations of anyone living in the United States. There is simply no frame of reference in our entire history and human experience that can guage where we would have to go to win a battle of attrition with China. The numbers are profoundly imbalanced even without and before considering how much control over our national debt they have.

So, for you, Mr. Brilliant, unless your are willing to produce U.S. products in a prison environment, entirely for NOTHING as your prevailing wage, and then do it for 100 hours per week while living out of a cell with 10 other 'roommates' in close promimity, 7 days week, you'd better think again how smart it is to turn over even our 'low end' wage jobs. There is virtually no depth so low that we can reach to in order to find an equalibrium in the debt environment we have backed ourselves into.

So called 'free trade' has handed over, on a 'silver platter' to the Chinese our entire economic security. To remain on the same track means we have entered into a 1000 year war of economic attrition we cannot win. They know this explicity and if you read the writings of both military and political figures in China, they clearly state their INTENTION to win this contest against us.

THEY MAKE NO SECRET OF THE PLAN. It is we who are too in denial to believe it.

They have our money, but much more critically to the point, they have time and patience on their side and a population and culture that doesn't scream me me me about everything. In fact, to be unique and contra to the governments direction can get you a prison sentence or death. A population that is marching (literally) to the same drummer in unison.

Our is a country of a collective attention deficit disorder, blinded by the facts and without the patience and appetite for the depth we will need to go to win a war of attrition with China.

The future will be very different than we have either planned or imagined.